Entrepreneurship is one of the fundamental
aspects to any progressive and advanced society. By providing individuals (and organizations)
with economic incentives to provide good products and services – jobs are created,
wealth is created, and people receive money to finance their needs. In today’s modern
world, we can thank vision minded entrepreneurs for the Internet, advanced medicine,
and tremendous advancements in technology. This article will focus on entrepreneurship
and what is it like to be an entrepreneur.

First, of course, the legal disclaimer

Please note that the information
in this article is not to be used as consulting, accounting, or legal advice. The
following information is provided with the understanding that this article is not
a substitute for professional advice, and is merely for informational purposes.
TheFinanceResource.com is not responsible for the use of any information contained
below or for the factual accuracy of any statements made below.

The Article

Contrary to popular belief, the
most successful entrepreneurs are not the ones that have taken excessive risk. It
is important to think of your role as an entrepreneur as a professional – much like
a doctor, lawyer, accountant, or dentist. Your profession involves building or acquiring
business ventures, understanding their risks, applying the appropriate financial
management, and rendering yourself (or your organization) a profit.

Entrepreneurship comes with its
outstanding benefits and troubling downsides. Primarily, the benefits include the
ability to be your own boss (both a blessing and a curse), the ability to create
a vision and see it to fruition, and to possibly become very wealthy. The downsides
are the long hours, uncertainty of income, and of course the possibility that your
venture could fail. Many new entrepreneurs stake a significant amount of their personal
wealth (if not all of it) into developing new businesses. Additionally, many entrepreneurs
source debt or equity capital, which makes you (as the entrepreneur) accountable
to a financial institution or private investor. If you have taken on a debt obligation,
you will most likely be personally responsible for this debt should your venture
not work out. As such, this can create a tremendous amount of stress for any entrepreneur.

One
of the key factors to becoming a successful entrepreneur is, again, to be aware
of the overall risk that you are taking before you undertake any business venture.
Carefully examine the product/service you are selling, the market that you are operating
within, and the possibility of how much money you can lose should the venture not
work. Extensive research and development of a business plan is key to your success.
The FREE Business Plan and property analysis
tools offered for FREE by TheFinanceResource.com can help you
effectively plan your venture.

The reason that most entrepreneurial
ventures fail is because the owner or senior manager has not properly budgeted expenses.
Most businesses are able to generate enough revenue to commence and maintain business
operations. However, without properly understanding your fixed and variable costs,
your business is destined to fail. Again, it imperative that you accurately develop
a business model that focuses on your monthly outflows of capital. Always build
in contingency costs as you will most certainly have expenses that you did not expect.

If you are having trouble developing
a business plan that can effectively predict your expenses or revenues, you should
consult a business planning firm or certified public accountant that can help you
understand your startup costs, your monthly expenses, and your expected monthly
income.

One of the most common problems
facing any entrepreneur is burnout. As a new entrepreneur (or owner of a newly acquired
business venture) you can expect very long hours for the first one to two years
of operation. Seventy to ninety hour work weeks are not uncommon. This can take
its toll not only on your mental health, but also on your family and friends. It
is very easy to become so involved with your business that you forget about the
important people in your life. Additionally, it is equally important that you not
lose sight of the goals that you set for yourself when you decided to launch you
business venture. It is always important to set reasonable goals for yourself, not
only for the long term – but also in the short and intermediate term. Reward yourself
nicely when you meet your goals. Remember, you started your business to generate
income and build wealth for yourself – so enjoy it. Money is a means to an end,
and not an end onto itself.

Another problem facing many entrepreneurs
is the current economic climate in the
United States
and abroad. This creates additional stress for entrepreneurs as there is greater
uncertainty regarding top line income. Again, outstanding business planning will
build “stress” factors into your business model to ensure that your company can
continue its operations despite moderate or substantial declines in revenue. Never
underestimate your costs, and never overestimate your income.

Work like hell – that pretty much
is the 75% ingredient involved with successful entrepreneurship. Chances are that
you do not have a product that is so proprietary or special that it just sells itself
(think iPod). As discussed earlier, the hours of entrepreneurship are long (and
often lonely), and you must fully understand that everything falls on your shoulders.
The buck stops with you. Although it is highly cliché, “heavy is the head the wears
the crown.” There will be many nights fraught with planning, looking over numbers,
seeing where you can make improvements, dealing with administrative issues, and
worrying.

One of the other things you must
realize as an entrepreneur is that a significant part of your profession will involve
fixing problems. You will inevitably have problems with vendors, accounting issues,
clients that are slow to pay, employee problems, customer complaints, and a whole
host of other issues that you will face on a day to day basis. This is one of the
most significant drawbacks to entrepreneurship, especially for new entrepreneurs
that didn’t realize the immense effort required to run a successful business. The
key for dealing with these issues (or is to have clear and decisive protocols that
you will implement as each of these problems occurs. Learn for each problem, and
see how it can be avoided in the future.

Overall, entrepreneurship can be
extremely exciting and stressful at the same time. This article was short, and was
designed just to give you a simple taste of what entrepreneurship entails. Again,
a few final things to remember:

Create a great
business plan (underestimate revenues, overestimate expenses)

Hire a great
accountant that can assist you with the many tax/employment issues that you will
face.

Treat entrepreneurship
as a profession – remember, it is your job to understand a venture, its risks, how
to finance the venture, and how to operate the business properly.

Understand
that it make take time for your business to become profitable.

Prepare for
long hours and ongoing problems that you will face on a daily basis.

Set short
term, intermediate, and long term goals – reward yourself nicely when you reach
them.